F&I

Setting the Pace

For all their many differences, this year’s F&I Pacesetters share a host of commonalities in the way they approach F&I performance, customer satisfaction and regulatory compliance. But only one will be named the 2014 F&I Dealer of the Year.

This year’s field consists of operations from Arizona, Colorado, Georgia, Oklahoma and Texas. And each operation boasts active management teams, pay plans that balance performance with customer satisfaction, and multilayered compliance procedures. The following profiles provide a glimpse at this year’s F&I Pacesetters and the people who lead them.

Bob Moore Auto Group

Pictured are a few members of Bob Moore Auto Group’s 39-person F&I team. Collectively, they average just north of $1,200 per copy on new-vehicle deals, and more than $1,000 on used. VSC sales lead the way with an acceptance rate of 46%, followed by GAP at 43%.

Background Check: Bob Moore opened his first dealership, a used-car lot, in Wichita, Kan., in the early 1950s. He would add an Oldsmobile franchise before selling both stores in 1970. That’s when he moved his family to Oklahoma City for a chance to own a Cadillac dealership. Today, the Bob Moore Auto Group counts 15 dealerships under its banner and is operated by Mark Moore, the founder’s son.

The Numbers: The group, which employs 39 F&I managers, averages just north of $1,200 and $1,000 per copy on new- and used-vehicle sales, respectively. VSC sales lead the way with a 46% acceptance rate, followed by GAP (43%), tire-and-wheel (17%) and windshield protection (14%).

Compliance Check: Moore requires his F&I managers to include a compliance checklist in every deal jacket. Three-quarters of the items cover state and federal laws; the rest pertain to the group’s internal controls, including a customer needs analysis completed by the sales team. It is designed to identify what customers are looking for, their driving habits and more. Curtis Hayes, the group’s CFO, says the process helps speed up transaction times while ensuring customers land on a vehicle they want and can afford.

The group’s F&I team underwent AFIP certification for the first time this year. EFG Companies provides regular compliance training and the group employs Compli’s compliance management system to manage its compliance training efforts. In the fourth quarter, the organization expects to enforce caps on F&I products.

Hayes admits Bob Moore Auto Group takes its compliance cues from the publicly traded dealer groups. “We evaluate their actions and policies and try to emulate what they’re doing, but with a little more flexibility,” he says.

Secret Weapon: Driving this group’s success is the work environment it has established for employees. “We have a set of core values: commitment, opportunity, respect and empowerment — or CORE,” Hays says. “We operate with the goal of providing superior employee satisfaction. And if we can do that, we think it will lead to superior customer satisfaction.”

Another key is the group’s focus on the customer experience, which is driven by the needs-analysis process. “Customers are more educated today about buying a car than they’ve ever been. What we’re trying to do is capitalize on their knowledge,” Hayes says. “If they leave without a car, more than likely it was something we did, because there are no ‘be-backs’ in this world.”

The process also feeds the F&I department, providing producers with the information they need to customize their menu presentations. Hayes says even the products listed on the group’s F&I menus are selected with the customer in mind. “We just try to think about what’s important to our customers,” Hayes says. “So we want to make sure we have good product at a good price point.”

Industry Leader: The group’s 15 dealerships have earned a host of awards. Last year, business magazine OKCBiz named the group’s Ford store, which sold more Mustangs and F-150s than any other dealership in Oklahoma, to its annual “Best of Business” list. Bob Moore Subaru earned Subaru’s 2013 Stellar Care Award for the third year in a row, while Bob Moore GMC in Oklahoma City earned GM’s Mark of Excellence distinction. The group’s Cadillac and Nissan stores in Norman, Okla., also earned the Master Dealer Award and the Award of Excellence, respectively, while Bob Moore Mazda earned its second President’s Club award.

Setting the Pace: Last year, the Moore group jumped into action the morning after an EF5 tornado struck Moore, Okla., donating four pallets of bottled water to help victims. The group also created Red Cross collection centers at each store, assisted with cleanup efforts and managed a shelter established at a local church.

The group also supports the Oklahoma Regional Food Bank, donating more than 133,000 pounds of food to date. The group also stages the largest single-day blood drive for the Oklahoma Blood Institute, an organization it has supported since 2002. Hayes says the group has donated enough blood to save more than 535,000 lives. During Christmas, Mother’s Day and Father’s Day, the group sets up and staffs a gift shop for patients of the Children’s Hospital at the OU Medical Center. The organization stages a similar event for Valentine’s Day.

Five Star Ford

Pictured is Five Star Ford’s leadership team, including the group’s founder Sam Pack, as well as Tony Pack, Terry Rich and MM Ross, the group’s North Richland Hills, Texas, location’s dealer principal, general manager and F&I director.

Background Check: Five Star Ford of North Richland Hills, Texas, is part of a group that consists of four Ford dealerships located in the sprawling Dallas-Fort Worth metro area. The group was founded in 1980 when Sam Pack, a former Ford Credit employee, acquired his first store in Carrollton, Texas. Pack purchased the North Richland Hills location in the summer of 1991. The group’s two other stores are located in Plano and Lewisville, Texas. Pack remains active as president of the group. He is joined by his son Tony Pack, who serves as the organization’s vice president.

The Numbers: Service contracts and GAP lead the way for the group’s eight-person F&I team, each penetrating at a rate of 58%, followed by etch (25%) and tire-and-wheel coverage (21%).

Compliance Check: According to MM Ross, F&I director at the North Richland Hills location, the group made the decision two years ago to focus more on product sales than reserve, about a year before the Consumer Financial Protection Bureau released its March 2013 bulletin on dealer participation. “This move was made because of the ever-increasing spotlight being put on reserve dollars,” Ross says, noting that caps on product pricing and markups have been in place for years. “At the time, many people questioned our decision. We now look back and believe that was the right decision. It put us ahead of the curve.”

Ross and all eight of his F&I producers are also AFIP certified. He also credits David Grier with First Dealer Resources (FDR), which merged with IAS this past February, for keeping his department current on all rules and regulations.

“Prior to merging with IAS, Chris Kerby (now president of sales, marketing and training for IAS) and his team at FDR had been a partner of ours for 17 years,” Ross notes. “That type of relationship with an administrator is uncommon, and they do a great job. If we need something, Chris will have one of his reps in here for a day, not just a couple of hours.”

Secret Weapon: Sam Pack came up with the Five Star name because he felt it exemplified excellence in customer service. “Our whole philosophy centers around two things: We want employees who love their jobs and customers who love our employees,” Ross says, adding that the organization’s owner loyalty retention rate in 2013 was 72.4%, which is seven points higher than the national average. “Our mission is to provide a best-in-class experience, one that makes our customers feel we are their trusted friend in the automotive business. And when you live out your mission statement, everything else takes care of itself.”

Industry Leader: The group’s founder was the 1998 recipient of what was then called the TIME Quality Dealer of the Year award. The dealership also is the only Ford store in the nation to win the OEM’s coveted Triple Crown Award every year since the award’s inception in 2001. The award is given for excellence in customer satisfaction, new-vehicle sales penetration and parts purchases.

Five Star Ford, which is the No. 5 Ford store in the nation, also is a 14-year recipient of Ford’s President’s Award, as well as an 11-year winner of the OEM’s F&I Partners in Quality. This year, Five Star Ford earned Edmunds.com’s Five Star Dealer Award for maintaining a five-star rating on the site for two years. The achievement follows another customer-satisfaction award the dealership earned in 2013, the Better Business Bureau’s Torch Award for Marketplace Ethics.

Setting the Pace: The group supports various organizations, including Ryan’s Project for wounded U.S. Marines. The group also hosts the annual Pros and Joes Celebrity Golf Tournament to benefit the LA Holy Angels Residential Facility in Shreveport, La., and the Urology Research and Education Foundation of Dallas.

Liberty GMC

Pictured is Liberty GMC’s five-person F&I team, including F&I Director Dusty Mandrell. Collectively, they average north of $1,500 per copy and 2.04 products per deal, all at a chargeback rate of less than 8%.

Background Check: The two-store, Peoria, Ariz.-based group is owned and operated by brothers Dana and Steve Moore. Dana, a Vietnam veteran who grew up in Topeka, Kan., began his career in the automotive business in 1976 when he took a job selling used cars at a Chevrolet dealership in Phoenix.

In 1987, Dana purchased his first store, Liberty Buick, then added Peoria Pontiac GMC in the mid-’90s. In 2003, the group added two Kia stores, which have since been sold. Dana’s daughter, Autumn Henderson, now heads the operation.

The Numbers: Under the guidance of F&I Director Dusty Mandrell, Liberty GMC’s five-member F&I team averages north of $1,500 per copy on 2.04 products per deal, all at a chargeback rate of less than 8%. Service-contract sales lead the way with a 66% acceptance rate, while GAP penetrates at a 55% clip. Other products on the menu include tire-and-wheel (24%), theft (14%) and environmental protection (10%).

Compliance Check: Six years ago, the dealership equipped every F&I office with audio and video equipment to record transactions. Mandrell says it’s become more of a training tool than a way to resolve customer disputes. This year, the F&I director implemented pricing caps on F&I products. His department is also in the process of earning certification with the Association of Finance and Insurance Professionals (AFIP).

Three years ago, the group installed Compli’s compliance management system, which delivers and manages compliance training and testing. Finance managers are also required to attend finance training at CNA National’s Scottsdale, Ariz., facility. The group’s agent, Dealership Income Development’s Tom Luzader, also provides regular training on compliance, product knowledge and customer service. He also heads up the dealership’s new-hire training.

Secret Weapon: Autumn Henderson assumed a leadership role four years ago and brought with her a modern approach to the business. Mandrell says the changes she’s made and her leadership style have forged a closer bond between the organization’s front-end departments. “Everybody likes their job. We’re competitive, but it’s not a stressful environment. We all work together.”

Mandrell makes sure he has someone from his team helping the desk, and he has forged a solid relationship with the dealership’s business development center. He credits that connection with helping his department achieve a higher back-end average on deals from BDC customers than walk-in traffic.

The family atmosphere inside Liberty GMC has also had an effect on the organization’s CSI score, which sits at 95%. It’s also why 75% of the dealership’s business derives from repeat customers. Mandrell says the average tenure in his department is an enviable 7.6 years.

Industry Leader: In 2013, Henderson made Automotive News’ “40 Under 40” list for leading a cultural change inside her dealership. Last year, Liberty GMC earned its 11th GMC Dealer of the Year award and its 12th GM Mark of Excellence distinction.

Setting the Pace: Liberty GMC supports numerous youth sports programs, including Little League, youth football and hockey, and two tennis leagues. It also supports local back-to-school programs, the Susan G. Komen Foundation and the annual Muscular Dystrophy Walk. Its support for military veterans and active personnel extends to the Wounded Warrior Project, Packages From Home, Pets for Vets, the Folds of Honor Foundation, the Armed Forces Support Group, Honor House, the Luke Chapter of the Military Officers Association of America, the Feherty’s Troops First Foundation, and the Foundation for Service Dog Support.

McCaddon Cadillac Buick GMC

Since joining McCaddon Cadillac Buick GMC this past January, F&I Director Justin Gasman has more than doubled the department’s per-copy average, which sits in the $1,400 to $1,500 range for both new and used.

Background Check: The McCaddon name has been synonymous with the city of Boulder, Colo., since 1958. That’s when George McCaddon purchased what used to be a used-car operation with an Oldsmobile point. The dealer, who passed away 10 years ago, later added Cadillac, GMC and Pontiac franchises. Today, McCaddon’s son, Mark, carries on his father’s tradition.

The Numbers: The group’s profit per vehicle retailed average (PVR)sits just north of $1,500 on new and at about $1,400 for used, but there are months when the two-person F&I team’s per-copy average reaches into the $1,600 to $1,700 range — all while maintaining a sub-5% chargeback rate.

The department’s top seller is etch, or what it calls security coding. The protection penetrates at a rate of 80%. GAP follows with a 63% acceptance rate, while service contracts penetrate at 52%.

Compliance Check: The dealership employs several layers of compliance checks to ensure the F&I department adheres to federal and state regulations. The dealership recently installed an online compliance management system provided by American Financial & Automotive Services (AFAS). It distributes legal compliance content developed by Tampa, Fla.-based Mosaic Compliance Services to every employee in the dealership. The F&I policy section alone is 96 pages.

Secret Weapon: The dealership’s F&I director, Justin Gasman, joined the dealership in January and has since doubled its PVR. “They were running somewhere in the $600 to $800 per-copy range, which they were fine with,” says Gasman, a Senior AFIP-certified F&I pro. “I showed them it was possible to make $1,200 without having high chargebacks.”

The Boulder market touts the highest concentration of software engineers and PhDs in the U.S. — and a high number of cash customers, according to Gasman. “We’re literally selling products to rocket scientists. And if you think you’re going tell them about an onboard computer and not know what you’re talking about, they’ll sniff you out and you’re done.”

Gasman also has an unusual technique for building rapport with customers in the F&I office. Just before he and his customers review and sign documents, he’ll ask them what type of music they like, then access YouTube to find a song to play in the background while the deal is completed. “If you connect with someone musically, you get them talking, liking you and trusting you. And when that happens, they’re going to buy from you.”

The key, Gasman adds, is to never make the customer feel like they’re being sold. Instead, he simply presents their options and lets the customer select the option that fits their budget and — as he puts it — the level of protection they desire. “This isn’t a store where we sell a service contract and walk around for a week hoping the customer doesn’t cancel,” he says. “There’s no stuffing, no high-pressure sales tactics here. I simply treat people as I want to be treated.”

The location of Gasman’s office has also been critical to the success of his two-person department. It sits in the middle of the showroom, allowing him to stay connected to what’s going on in that department. “Nothing gets past me. I listen to what’s going on, and I’ll walk right over and crash a deal and take control of it,” he says. “I make sure the front-end gross is protected, but I also ensure we’re going to make our back end. But we really have a great team of salespeople who believe in the value of the F&I products we sell.”

Industry Leader: Twenty years after George McCaddon purchased the dealership, he was named the TIME Quality Dealer of the Year. Today, Mark McCaddon continues that tradition. Under his leadership, the store has been a Cadillac and Buick “Mark of Excellence” dealership for more than five years.

McCaddon is also active in the Colorado Automobile Dealers Association (CADA) and participates in several of the association’s programs throughout the year. The dealership’s F&I department also consistently ranks in the top 5% of GM dealers, and does so while ranking in the top 5% for CSI.

Setting the Pace: Having grown up in Boulder, Mark is a big supporter of the community. He supports the Boulder Valley Hospital, the Boulder County Safehouse for abused children and various other charities and organizations. He also remains an active supporter and contributor of Boulder’s flagship University of Colorado campus.

This year, he sponsored the Tee Up for Tike, a golf event that benefits Mother House for pregnant mothers in need. He also donates three cars a year to the CADA’s Clear the Air Foundation, which supports charities dedicated to helping individuals who suffer from environmental-related health issues, among other causes.

Vaden Automotive Group

Pictured is Jane Vaden Thacher, daughter of Vaden Automotive Group’s founder, Dan Vaden. She started in the group’s F&I department in 1994 before becoming F&I director in 1996. Today, she leads the group as dealer principal.

Background Check: The Savannah, Ga.-based dealer group was founded by Dan Vaden, who began his career in the early ’50s as a used-car sales trainee at a Chevrolet store in Jacksonville, Fla. He spent 15 years working his way up to general manager and, eventually, part owner, but he longed to own his own store.

That opportunity came when General Motors offered him a Chevrolet point in Savannah in 1968. It was built on an old dairy farm and remains in operation today. Vaden passed away in 2010, and the group is now operated by his daughter, Jane Vaden Thacher. The group now includes the original store, Dan Vaden Chevrolet, and seven others.

The Numbers: Vaden’s F&I managers are expected to maintain a minimum PVR average of $1,200. But the group’s average is well north of that. Leading the way are service contracts with an acceptance rate of around 60%, followed by GAP (57%) and prepaid maintenance (PPM) (33%).

Secret Weapon: Thacher began working at the dealership at the age of 13, operating the switchboard and writing up repair orders, among other duties. After graduating from the University of Georgia, she pursued a career in marketing before rejoining the family business in 1994. She immediately gravitated to F&I. “From what I knew working at the dealership, I felt F&I is the center point in the variable part of the business,” she says. “And I felt if I could master it, I would know how everything works.”

In 1996, Thacher became F&I director for the then four-store group. She immediately instituted a system for monitoring and managing performance, CSI and even contracts in transit. “So every night I’d get reports from every F&I office,” she says. “I remember being invited to present my nightly reports to a group of dealers and to talk to them about how we teach CSI. I thought it was the normal way to track business, but by the dealers’ reactions, I guess it wasn’t.”

Even though she’s now running the group, Thacher continues to push her organization’s F&I team. They are expected to maintain a minimum 40% penetration rate on service contracts, and they are rewarded nicely when their acceptance rates meet or exceed 50%. But those performance bonuses are withheld when an F&I department doesn’t maintain CSI at or above the group’s benchmark.

Compliance Check: F&I managers are required to sign a code of conduct that outlines what is expected in terms of behavior and adherence to compliance. The group’s F&I director tracks each producer’s 30-day CSI score. Results are then discussed during a weekly Tuesday-morning conference call with all F&I personnel.

The group also utilizes a compliance checklist for every deal. The checklists are verified by the group’s accounting department, which will kick back a deal if a single item is missing. Deals are also audited by Resource Automotive, which spearheads the group’s ongoing and new-hire training. Menu audits are also conducted monthly.

“My dad did business one way when he had just one store, and that was doing it the right way,” Thacher says. “We call it the Vaden way.”

Industry Leader: In 1992, Dan Vaden earned the TIME Dealer of the Year award. In 2008, he was inducted into the Savannah Business Hall of Fame for his leadership and support of the community. The group has continued to be active in the industry since its founder’s passing. Vaden’s vice president and general counsel currently serves on the Georgia Automobile Dealers Association’s board of directors. The executive is also a past members of the National Automobile Dealers Association’s board of directors.

The operation has also received several accolades, including the 2006 Better Business Bureau’s Diane Wahrman Torch Award for Marketplace Ethics. The group has earned GM’s Mark of Excellence distinction for the last five years and Nissan’s Owner’s First award for the last six. It has also earned Buick’s Honor Award for operating one of the Top 3 Buick dealerships in South Carolina.

Setting the Pace: The group supports a host of community groups and organizations. It hosts Gay Savannah’s Night Out every June in support of the lesbian, gay, bisexual and transgender community. And in November, it supports the Humane Society of Greater Savannah by kicking off a two-month campaign in which it donates $25 for every test drive and $1 for every Facebook post of an area pet. And with a military base located in every market it serves, the group supports the Wounded Warrior Project and Operation Hero House.

Software experts Jason Barrie and Marie Knight share advice for dealers and F&I professionals seeking new ways to drive production and enhance customer service in a department whose future is difficult to predict.